Blog

Nvidia Corporation (NVDA) is a top tech company known for its graphics processing units (GPUs) and AI systems. As of February 27, 2025, its stock price is $131.28 USD. This shows a 3.77% increase from the last close.

Pros of Owning Nvidia Stock:

1. Dominance in Graphics Cards Market:
   • Nvidia leads the GPU market, used in gaming, data centers, and AI. Its GeForce series tops the gaming market.
2. Leading Role in AI and Machine Learning:
   • Nvidia’s GPUs are key for AI training and inference. They’re vital for AI in industries like automotive, healthcare, and finance.
3. Strong Financial Growth:
   • In Q4 FY2025, Nvidia’s revenue soared 78% year-over-year. It made $39.33 billion in total revenue and $22.1 billion in net income (The Times).
4. Expanding Data Center Revenue:
   • Nvidia’s data center business jumped to $35.6 billion in FY2025. It’s expected to grow as AI demand increases.
5. Strategic Partnerships:
   • Nvidia has strong partnerships with Microsoft, Amazon, and Google. These partnerships help expand its reach and diversify revenue.
6. Innovative Product Releases:
   • Nvidia’s cutting-edge technologies, like the Blackwell GPU series, keep it ahead of competitors. Blackwell GPUs are set to see strong demand (Business Insider).
7. High Market Valuation Reflecting Future Growth:
   • Nvidia’s high valuation shows investor confidence in its future growth. This is due to the increasing demand for GPUs, mainly in AI.
8. Expansion into Autonomous Vehicles:
   • Nvidia is a key player in autonomous vehicles. Its Drive platform is used by major car makers for self-driving tech.
9. Favorable Industry Trends:
   • The global AI and machine learning market is set to grow a lot in the next years. This offers Nvidia big opportunities for revenue growth.
10. Solid Profit Margins:
    • Nvidia keeps impressive profit margins. This is thanks to its leadership in the GPU market and the high value of its AI-driven products.

Cons of Owning Nvidia Stock:

1. Geopolitical Risks:
   • Nvidia’s chips are made in Taiwan, which makes it vulnerable to global tensions. This could mess up its supply chains (Axios).
2. Market Volatility:
   • Nvidia’s stock price can change quickly. A big drop, like the 17% fall due to AI competition from China, can cause big losses (AP News).
3. Regulatory Scrutiny:
   • Nvidia is being looked at by U.S. antitrust regulators. This could affect its business or lead to fines (FT).
4. Rising Competition:
   • Companies like AMD, Intel, and Google are catching up. This could cut into Nvidia’s market share in GPUs and AI.
5. Supply Chain Risks:
   • Nvidia depends on others to make its chips. Any supply chain problems can hurt its production and earnings.
6. High Valuation and Market Sentiment Risk:
   • Nvidia’s high stock price makes it more likely to see price drops if market feelings change or if there’s bad news.
7. Dependence on the Gaming Sector:
   • Nvidia is growing its business in data centers and AI. But it’s not yet free from the ups and downs of the gaming market.
8. Exposure to Cryptocurrency Market:
   • Nvidia’s sales can be affected by the ups and downs of cryptocurrency mining. Booms are good, but downturns are bad.
9. Potential Technology Obsolescence:
   • Nvidia leads in GPUs now, but new tech could make its products outdated if competitors catch up.
10. Debt Exposure:
    • Nvidia has a lot of debt, even with strong finances. If its earnings slow, paying off this debt could get tough.

Conclusion:

Investing in Nvidia could be very rewarding, thanks to its AI, GPU, and data center leadership. But, investors need to think about the risks from global issues, market swings, and competition before deciding.